Brexit was a huge surprise for many – few people expected the UK to vote to break free of Europe. Without getting into the intricacies of how the UK actually goes about doing this, what it has done is send a warning sign that Europe wasn’t working – it needed to reconnect with the people.
There is no doubt that post-Brexit there is an increase in political tension and the general feeling of dissatisfaction among the electorate.
What impact could Brexit have on European equities?
We don’t know what the true aftermath of Brexit is yet in terms of the economic impact. But what we are seeing is that the consistent, reliable growth names that we have been investing in for many years continue to do very well.
This is leading to some people saying that they have gone too far, that prices have become too excessive. In our view, this is not true. In a 0% interest rate world, a lot of these companies continue to grow very steadily and we are sticking with them and they are doing very well.
Where are you seeing growth?
It’s about the ability to grow in a low-growth world. It’s not easy to find economic growth generally. In Europe, we’ve been used to that for many years now, but we’re seeing growth in emerging markets slow down as well.
Growth is coming from companies changing the way they go about business. They outsource to specialist companies, be it delivery systems or IT. These kinds of growth themes continue to be relevant.
To think you’ll be able to achieve 15-20% growth consistently over the next five years is naïve. There are very few companies that can do it. We are trying to buy and hold and participate in the future of what I consider to be some genuinely fantastic companies.
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